Reaping The Demographic Dividend : Daily Current Affairs

Relevance: GS-2: Issues relating to the development and management of Social Sector/Services relating to Health, Education, and Human Resources.

Relevance: GS-3: Indian Economy and issues relating to planning mobilization, of resources, growth, development, and employment : Inclusive growth and issues arising from it

Key Phrases: Demographic Dividend, the Great Leap Forward, One Child Policy of China, Cultural Revolution, Premature Ageing Population.


  • The World Population Prospects 2022 report of the United Nations has forecasted that India’s population will surpass that of China by 2023. This necessitates discussion about pros and cons of population rise.


  • The United Nations Population Fund defines Demographic Dividend as the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population is larger than the non-working-age share of the population. The age group of 15-59 years is considered as the working age population and other than this, a non-working or dependent population i.e. children and old age people.

Data and Statistics

  • As per UN report, the world’s population will touch eight billion this year and rise to 9.8 billion in 2050.
  • In absence of China’s one child policy, its population would have naturally risen and peaked to 1.6 billion in 2040 allowing the world’s second-largest economy to enjoy a much longer “demographic dividend.
  • By 2050, China’s population will be only 1.3 billion including 500 million aged people (over 60 years of age). While India’s population may grow up to 1.7 billion having only 330 million above 60 years.

Additional Information

One Child Policy

  • It refers to a population planning initiative in China implemented between 1980 and 2015 to curb the country's population growth by restricting many families to a single child.
  • It was enacted to address the growth rate of the country's population, which the government viewed as being too rapid.

Premature Ageing

  • An ageing population and slower labour force growth affect economies in many ways -
    • The growth of GDP slows
    • Working-age people pay more to support the elderly, and
    • Public budgets strain under the burden of the higher total cost of health and retirement programs for old people

The Great Leap Forward of the People's Republic of China

  • It was an economic and social campaign led by the Chinese Communist Party from 1958 to 1962.
  • CCP Chairman Mao Zedong launched the campaign to reconstruct the country from an agrarian economy into a communist society through the formation of people's communes.

The Cultural Revolution

  • Formally known as the Great Proletarian Cultural Revolution, it was a socio-political movement in the People's Republic of China launched by Mao Zedong in 1966, and lasted until his death in 1976.

India’s potential workforce

  • India is getting a demographic dividend that will last nearly 30 years.
  • India’s potential workforce to rise from 885 million to 1.08 billion people over the next two decades and remain above a billion people for half a century. These new workers will be much better trained and educated than their existing counterparts. Thus, the next 50 years will be an Indian summer that redraws the face of global economic power.
  • Trends such as digitization and automation, shifting supply chains, urbanisation, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are accelerating to create $2.5 trillion of economic value in 2030 and support 112 million jobs (about 30% of the non-farm workforce) – McKinsey.
  • According to The Economist, as the pandemic recedes, four pillars are clearly visible that will support growth in the next decade –
    • A single national market
    • An expansion of industry owing to the renewable-energy shift and a move in supply chains away from China
    • Continued pre-eminence in IT, and
    • A high-tech welfare safety-net for the hundreds of millions left behind by all this.
  • India’s bad infrastructure and poorly skilled workforce will impede its growth.

India vs China

  • India is still a young country and in a much better position to transform itself compared to China of the 1970s.
  • India is still an open society where mass protest matters and produces results.
  • Indians have not been traumatised as Chinese were at the time of Mao Zedong’s death and in the aftermath of two events he set off and which roiled China for decades — The Great Leap Forward and the Cultural Revolution.
  • The IT technologies and Internet now available in India have matured exponentially. Right from video conferencing to instantaneous payments and satellite imaging are getting better and cheaper by the day.
  • These can revolutionise learning and transform Indian society at an astonishingly low cost, unimaginable through much of China’s economic liberalisation.
  • India’s administrative systems manage to deliver and its infrastructure is in far better shape today than it was for China at the start of its reforms.
  • Nor did India impose the equivalent of China’s one child policy that has seen China suffer the consequences of a prematurely ageing society with a skewed gender ratio.

Deep divide in China: Hukou System

  • The Hukou system codifies various social inequalities in China by dividing the population into two classes, rural and urban, to determine where citizens can receive public services.
  • India does not have this which in China binds rural folk to rural parts creating a deep divide between a small and prosperous urban China and a much larger, very deprived rural China.
  • It dis-incentivizes migration to urban areas – only about 36% of China’s overall population is urban and fully 64% is rural. The huge divide between urban and rural China is almost unbridgeable.

Reaping benefits of demographic dividend

  • India needs to invest massively in quality school and higher education as well as healthcare on an unprecedented scale to build human capital.
  • Ending extreme poverty and creating a more inclusive society would remain key to supporting massive growth.
  • Skill development to increase employability of the young population. Establishment of National Skill Development Corporation (NSDC) is a good step in this direction.
  • Academic-industry collaboration is necessary to synchronise modern industry demands and learning levels in academics e.g. Higher Education Finance Agency (HEFA) can help India in this regard.
  • Success of schemes like Ayushman Bharat and National Health Protection scheme (NHPS) is necessary.
  • Schemes like Start-up India and Make in India would bring the desired result in the near future, if they are fully implemented.
  • Nutrition level in women and children needs special care with effective implementation of Integrated Child Development (ICDS) programme.
  • India needs to create ten million jobs per year to absorb the addition of young people into the workforce. Promoting businesses’ interests and entrepreneurship would help in this regard.
  • Rural to urban migration leads to rapid and large-scale increase in urban population. Providing access to basic amenities, health and social services in urban areas need to be the focus of urban policy planning e.g. schemes such as Smart City Mission and AMRUT.

Way Forward

  • India must seize the moment and not be incremental in its approach. Given the will it can initiate and see through a transformation that will stun the world, even more than China’s has so far. India’s improved ranking in the World Bank’s Ease of Doing Business Index is a good sign.

Source: The Hindu

Mains Question:

Q. India needs to invest in quality education as well as healthcare. Discuss in the context of the recently published World Population Prospects report 2022. [150 Words].